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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Caesars retiree bitter after flow of pension checks stops

25 March 2015

LAS VEGAS -- Kenneth Houng became one the Strip’s first Asian casino hosts when he joined Caesars Palace in 1982.

He never wanted to work anywhere else. He spent 32 years at the resort, retiring as an executive vice president.

“Caesars was the place to work. Everybody who worked for Caesars was very proud,” Houng, 78, said Monday.

He has a much different feeling about Caesars today.

Houng is one of 63 former employees and executives whose retirement payments were halted in January when Caesars Entertainment Corporation placed its largest operating division into a Chapter 11 bankruptcy reorganization in an effort to cut $10 billion in debt.

According to a filing with the U.S. Bankruptcy Court in Chicago, the former workers are owed nearly $33 million in retirement pay.

Instead of his monthly check, Houng received a form letter/memorandum from Caesars dated Jan. 15, explaining his retirement fund had been included as unsecured debt in the Caesars Entertainment Operating Co. bankruptcy.

Other than $1,400 a month in Social Security, Houng lived off the retirement check.

“It was devastating,” said Houng, as tears welled up in his eyes. “You can’t do this to people my age.”

The issue came to light earlier this month.

The pension plans — known as Supplemental Employee Retirement Plans — where inherited by Caesars Entertainment during the casino operator’s various corporate acquisitions.

After the Las Vegas Review-Journal first reported the matter, Gaming Control Board member Terry Johnson asked Caesars executives March 11 during a hearing over routine licensing matters what the company intended to do about the retirement benefits.

“The pensioners are an important matter that should not get lost in this discussion,” Johnson said.

Caesars outside attorney Steven Pesner told the Control Board the company was “seriously” looking at the matter.

“The issue will be addressed in a manner that is legal, fair and equitable by the company,” Pesner said.

Johnson said Tuesday he hasn’t had any communications with Caesars in the past two weeks.

The company will appear in front of the Nevada State Gaming Commission on Thursday morning and Chairman Tony Alamo Jr. said he expects the company to make a similar presentation that was made to the Control Board outlining the bankruptcy.

“I will ask detailed questions about the bankruptcy, including some of the questions about what we have seen in press concerning the retirement payments,” Alamo said.

Pesner called the Caesars reorganization “the largest and most complex bankruptcy in a generation.” A veteran bankruptcy attorney told the Associated Press the Caesars case “will be a long and ugly one.”

Houng and other retirees caught in the middle of the battle are waiting for answers.

His daughter, Las Vegas Realtor Nicole Houng, wrote a letter to U.S. Bankruptcy Judge Benjamin Goldgar on March 6. The letter has become part of the court filing.

Among the items she questioned was why retirees are losing their pensions in the bankruptcy while Caesars executives, including Chairman and CEO Gary Loveman, are taking home multimillion-dollar salaries and bonuses.

“My dad’s pension was earned by his 32 years of highly profitable service,” she wrote. “Why should he be penalized because (these) current Caesars executives have mismanaged funds and have not paid their creditors.”

Nicole Houng created a binder of information to help her father in his effort to regain his pension. She has a copy of the 1985 Executive Security Plan typed on a Caesars World Inc. letterhead.

She also discovered that before May 2013, the pension checks came directly from Caesars Palace. After that, the checks were drawn on an operating unit account.

Houng brought international customers to Caesars Palace over his career who “gambled hundreds of millions of dollars” at the Strip resort. He traveled overseas to meet up with high-end customers, often four or five trips a year.

Houng came to Caesars from the Playboy Club in London and was personally hired by the late Harry Wald, who was Caesars president in the 1970s and 1980s.

“I took a chance and moved my family to America,” Houng said. “This is just not right.”
Caesars retiree bitter after flow of pension checks stops is republished from Online.CasinoCity.com.